The FDCPA requires a debt collector, within five days of its initial communication with a consumer to send a written "validation notice" setting forth the person's right to dispute the debt. The individual has 30 days to send a notice to the debt collector if he disputes. During the 30 days, the debt collector may continue collections as long as activities are not inconsistent with the validation notice disclosures.

In Ellis v. Solomon and Solomon PC, Citibank hired a law firm to collect debtor Janet Ellis's alleged credit card debt. Solomon & Solomon, a law firm, sent the FDCPA required notice advising her of the debt and informing her that she had 30 days to dispute its validity. Otherwise the firm would assume the debt was valid.

After the validation notice was sent, but within the 30 days, Solomon & Solomon served Ellis with a collection lawsuit. The summons instructed Ellis about the need to file an appearance and alert insurance carriers. In neither the validation notice nor the lawsuit papers did the law firm inform Ellis about the effect the suit had on her validation rights.

Sample clarifying language from Thomas v. Law Firm of Simpson & Cybak, 392 F.3d 914, 919-20 (7th Cir. 2004):

This advice pertains to your dealings with me as a debt collector. It does not affect your dealings with the court, and in particular it does not change the time at which you must answer the complaint. The summons is a command from the court, not from me, and you must follow its instructions even if you dispute the validity or amount of the debt. The advice in this letter also does not affect my relations with the court. As a lawyer, I may file papers in the suit according to the court's rules and the judge's instructions.

The US Trustee wants to know of misconduct that may occur before, during, or after a bankruptcy case. Examples of misconduct:

• False, improper, inaccurate claims
• Malicious refinance scams
• Predatory credit card offers
• Improper collections
• Wrongful foreclosures
• Violations of automatic stay

All reports should be in writing and include the debtor's name, phone, address, and other contact information. Include account information and copies of documents supporting the misconduct claim. Include the creditor's name, telephone, address, and other contact information.

For cases heard in San Jose, CA, misconduct may be reported to:

Office of the US Trustee
RE: Creditor Misconduct
280 South First Street, Suite 268
San Jose, CA 95113
Tel: (408) 535-5525
Fax: (408) 535-5532

People pondering whether to file for bankruptcy may believe they are behind in life, but it is just a moment in life. When to file for bankruptcy is a strategy in itself just like how the Amazing Race teams decided whether to take a bus or train to the airport in Episode 1. For instance, a debtor should wait to file a petition if he anticipates sizeable new debt such as medical bills. Or if a person anticipates inheritance, he may wait so that he does not have to turn over non-exempt property received within six months of the petition date to the trustee for distribution to creditors.

In the first Amazing Race episode, the teams had to first get on a train or bus to the airport to catch a flight to Chile. Those who made it on the first flight felt glee, but then realized the first flight was delayed. This was a lesson that sometimes it is ok to be late, and those who win are not always really the winners.

As with the Amazing Race, when people go through the bankruptcy process, they will realize that they can still come out ahead in life though they fell behind some of their peers in money management in the past. With reforms in financial institutions, the government is also assisting people in trading and investing. For instance, on 1/21/2010, President Barack Obama called for restrictions on financial institutions that would limit the extent to which depository lending institutions, or their parent firms, may engage in proprietary trading and investing. The President's proposal would place limits on the growth of the market share of liabilities at the largest financial firms. This proposal should help consumers in having oversight on companies to determine whether they are systemically risky.

Mann lays substantial blame on Congress's bankruptcy 2005 reforms, which implemented a number of procedural safeguards to prevent bankruptcy abuse but have had the effect of increasing the cost and time of filing. Potential filers have had to produce a flurry of paperwork about assets, income, and expenditures. The added paperwork has caused more reliance on lawyers, which has significantly raised the cost of filing.

Mann is also critical of a loophole that has existed in the Bankruptcy Code since 1978. When a homeowner owes more on his mortgage than the home is worth, the bankruptcy judge may not convert any excess owed into unsecured debt. A judge can make such a conversion with second mortgages and vehicles.

Mann proposes a two-tiered system that would allow filers without substantial income or assets to file a simple form that would not necessitate more than basic information. Within a few days of filing the form, a debtor's unsecured debts would be wiped away, without the need of bankruptcy hearings. The legal process and more detailed paperwork would be necessary for debtors with assets and income in order to assess the debtor's responsibility.

There is certainly a lot of waste in the bankruptcy system. Revamping the entire system would seem to be a pipe dream because it is very politically unpopular to support a measure that can be construed as making it easier for people to file bankruptcy. A year ago, there was buzz that Congress would repeal the exception discussed above and would allow bankruptcy judges to write-down mortgages. That never happened even when the housing crisis was at its worst, and as the economy has picked up it will be more difficult to pass bankruptcy reform. Mann's proposals are important, however, if only because they highlight how the system could operate much more effectively for people in need.

The effect of Placer Fire Equipment's bankruptcy will be felt elsewhere in the Sacramento area. Its clients included the Sacramento Metropolitan Fire District, the governor's Office of Emergency Services, and the North Lake Tahoe Fire Protection District. The company owes nearly $1 million to Folsom-based Sierra Vista Bank, $63,000 to Sacramento County Airports, and at least eight employees will be out of their jobs and may be out of back wages as well. In bankruptcy, the court will liquidate Placer Fire Equipment's assets and distribute the proceeds among its creditors. But, with total debt of $3.8 million, it is unlikely that any creditor will receive more than pennies on the dollar.

It is hard not to at least partly blame the economy for any company's failure. Placer Fire Equipment went from $1.6 million in income in 2008 to a more than $1 million loss in 2009. While the news has been dominated by bank failures, foreclosures, and unemployment. It is stories about small companies that capture how starkly fortunes of many Americans changed because of forces beyond their control.

The official jobless rate reached 13.1% in January, the highest rate that Sacramento has had since the current calculation method was instituted in 1990. However, the nearly 1% increase from December mostly reflects seasonal labor being let go after the holiday season. Only 4,400 permanent payroll jobs vanished, which is a low number for January. Many of these jobs were retail positions as the lackluster holiday season spelled the end to a number of jobs and even a few businesses.

The numbers, released by the Employment Development Department, showed that Sacramento lost nearly 50,000 jobs in 2009, twenty percent more than had previously been believed. That number amounts to almost 6 percent of all local jobs. Even the local health care industry shed 1 percent of its jobs, despite the general belief that health care is the most recession-proof industry.

Two other local counties, Yolo and El Dorado, had unemployment rates topping 13 percent. Placer County was just a little better at 12 percent. The statewide January unemployment rate was 12.5 percent.

As with all economic figures released these days, the unemployment figures were sobering. But, the numbers do provide some hope that a rebound is impending. With many families struggling month-to-month with their finances, hope is a powerful thing.

The BAPCPA had attempted to clamp down on attorneys who were providing clients with ways to exploit impending bankruptcy. Read broadly, the law the Act instituted seemed to prohibit bankruptcy attorneys from advising clients to take on any debt, even necessary expenses such as signing an apartment lease or acquiring a car for transportation. Many attorneys complained that such an interpretation hamstrung their ability to provide effective counsel. In the case that reached the Supreme Court, a Minnesota law firm, Milavetz, Gallop & Milavetz, argued that the rule violated the First Amendment by restricting attorney-client communication.

Sotomayor did not agree that the rule violated the First Amendment because attorneys have no right to affirmatively advise clients to commit abusive pre-filing conduct. However, her opinion indicated that the law only applies when the "impetus for the advice to incur more debt is the expectation of filing for bankruptcy and obtaining the attendant relief." In other words, attorneys can advise clients to rent an apartment or make a reasonable car purchase so long as the attorney does not expect or intend that the obligations will be excused by bankruptcy.

Sotomayor's standard does not draw a bright-line rule, so attorneys will have to carefully consider whether their advice adheres to the language in the Milavetz case.

In bankruptcy, a person may fear surrendering property to creditors, but remember to have courage and proceed even when there is fear. Do not wait for courage, but accept the fear. What changes people are experiences, not homework, not degrees. Scratch out the word "hope", and learn what it is like to be pushed off the edge of a cliff, forced to invent water on the way down. Declare what will happen and commit to the outcome.

In bankruptcy, there are different kinds of debts and creditors. A creditor is someone owed a debt. Secured creditors loaned money in exchange for interest in the property. The property is collateral. Secured debts include mortgages, car loans, and furniture loans. With secured debts, besides returning the property to the creditor, a debtor may pay for the property in full and keep it, or reaffirm the debt and agree to continue to pay the debt as if a bankruptcy petition was not filed, knowing that if the debt is not paid, the debtor may be sued for collections. Unsecured creditors are all other creditors such as doctors' bills, credit cards, past-due utilities.

"Hoping" creates disappointment. Every situation is temporary. People can be wrong even when they are sure. For example, when people think of bankruptcy, they think of the negatives like a ruined credit. But, filing for bankruptcy may make something possible that was not possible before. People secretly like to see others taken down. They wonder why they did not do something when they see others accomplish. When other people try to kill dreams, remember that just because they seem sure does not mean they are right.

Through bankruptcy court, the Bankruptcy Code prohibits a non-debtor counterparty in litigation from exercising any rights and remedies against the debtor or its property or from continuing litigation against the debtor.

Derivatives continue to be traded on public exchanges such as the New York Mercantile Exchange (NYMEX), but the majority of transactions are "over the counter" (OTC) trades negotiated directly between private parties that are exempt from regulation by the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC) or other governmental regulatory bodies.

With Lehman, because its bankruptcy disrupts the financial markets, the Bankruptcy Code safe harbor provisions permit counterparties to:

• terminate securities, commodities, forward, repurchase, and swap agreements; exercise contractual, exchange-specific or other rights to accelerate, liquidate, terminate or set-off under the parties' securities and derivatives contracts;
• exempt pre-bankruptcy petition settlement payments, margin payments and other transfers made in connection with securities and derivative contracts from avoidance as a preference or a constructive fraudulent conveyance when such payments are made to or through certain categories of persons.

Volcker's speech comes at the same time that the Federal Trade Commission ("FTC") issued a Notice of Proposed Rulemaking ("NPRM"), seeking comment on a proposed Rule that would regulate loan modification, foreclosure rescue, and other mortgage assistance relief ("MARS") providers.

On the issue of international consensus on the Volcker proposal, there were grounds to anticipate success. Volcker felt it would not be difficult to detail the functional definition of hedge funds and private equity funds that commercial banks would be forbidden to own, sponsor or invest in, and proprietary trading in they would be forbidden to engage. Volcker highlighted conflicts of interest in the participation of commercial banking organizations in proprietary or private investment activity, remarking "Hedge funds, private equity funds, and trading activities unrelated to customer needs and continuing banking relationships should stand on their own, without the subsidies implied by public support for depository institutions."

Meanwhile, the proposed FTC Rule, issued on February 4, 2010, would ban MARS providers from collecting fees prior to delivering MARS services, prohibit misrepresentations in the marketing of MARS services, and require affirmative disclosures about the nature and terms of the services. The proposed Rule extends liability for violations to persons or companies who provide assistance or support to MARS providers that violate the proposed Rule.

The Volcker proposals were part of structural reform to deal with the problem of "too big to fail", ensuring that large institutions and their managers and creditors do not assume a public rescue will be forthcoming in times of pressure. But, for Volcker, non-"systemically significant" non-bank institutions, such as hedge funds, private equity funds, and other private institutions, should be allowed to fail in a competitive free enterprise system.

The FTC Rule comes from 2009 Omnibus Appropriations Act, as clarified by the Credit Card Accountability and Disclosure Act, giving the FTC rulemaking authority to prevent unfairness or deception in practices involving loan modification and foreclosure rescue services.

Until now, the Obama Administration has focused its Home Affordable Motification Program (HAMP) on modifying first mortgages. However, many modifications fall through because an agreement fails to be reached with the holder of the second mortgage. So, the focus is now shifting to coming up with solutions for the second mortgage.

Many second mortgages these days are completely unsecured because property values have dropped below the balance of the first mortgage. Due to complicated accounting rules, banks prefer not to take losses on their second mortgages because doing so would cause a big hit to their balance sheets. Also, even if a borrower goes into foreclosure, the bank can pursue the borrower for the balance owed on the second mortgage. Those two factors are dissuading banks from writing down second mortgages. A homeowner cannot complete a short sale without agreement from the bank holding the second mortgage. And thus, many short sales have fallen through.

A short sale occurs when mortgage company holding the first mortgage agrees to allow the borrower to sell the home for less than the balance of the loan, and the borrower can walk away from the difference. In avoiding a foreclosure, the bank saves money and the borrower does not take a hard hit to his credit.

In a few weeks, borrowers who receive reduced payments on their first mortgage through HAMP will also receive a break on their second mortgages. Bank of America has signed up for this program and other large banks are likely to as well. The Obama administration will also be encouraging those who cannot qualify for a loan modification to pursue a short sale or deed-in-lieu of foreclosure. Holders of second mortgages may receive 3% of the unpaid loan balance, up to a maximum of $3,000, for writing down second motgages in the event of a short sale.

The higher number of filers does not reflect a worsening economy, but reflects the duration of the down times. American families have been living with joblessness, low housing prices, and tight credit markets for years, and many are unable to continue the uphill battle. The executive director of the American Bankruptcy Institute predicts that filings will top 1.5 million this year. Last year, there were 1.47 million filings.

Filers are now more likely than before to file Chapter 7 bankruptcy. Chapter 7, if approved by the bankruptcy court, allows the debtor to discharge unsecured debt and does not leave the debtor with a monthly payment. Only those making below the median income and with insubstantial assets may have a Chapter 7 plan approved.

On the other hand, Chapter 13 bankruptcies are decreasing. When Congress imposed a stricter bankruptcy code in 2005, one of the goals was to compel higher earners to file Chapter 13 bankruptcy, which requires filers to repay a portion of their debt over several years. Chapter 13 bankruptcy was in large part designed for homeowners who wanted to stay in their homes. But, so many homeowners are underwater in their homes that they have little incentive to stay. They sensibly decide to start over elsewhere with a fresh start.

An economic recovery may be on the horizon but there will be plenty of reminders of the Great Recession until then.

General Growth Properties Inc. developed Elk Grove Promenade intending to turn it into a destination shopping attraction for the south-of-Sacramento area. Instead, midway through development, General Growth filed bankruptcy and production stalled. A fence was built around the property and the partially-built mall was frozen in 2008.

Two large real estate firms, Brookfield from Canada and Simon Property Group from Indianapolis, have submitted multi-billion dollar bids to buy General Growth and its portfolio, including the Elk Grove Promenade. General Growth is in bankruptcy court in Manhattan, and the bankruptcy judge will have final say on which bid General Growth will accept.

A new owner could sit on the Elk Grove property until the market makes a large mall viable. Or, it could redevelop the property as a big-box center or an outlet mall. Any new work on the Promenade will likely only come with an improvement in the economy. Thus, the Promenade remains a large symbol of the Great Recession.

Webber was no longer with the team at the time Center Court opened and has since retired, but he remains a popular figure in Sacramento. Sacramento Kings fans have fond memories of the wildly entertaining Kings teams from the early part of last decade that consistently made it deep into the playoffs. Webber and business partner Jeff Dudum of Dudum Sports and Entertainment opened Center Court hoping to leverage that popularity into a hot Sacramento restaurant. But the restaurant business has suffered just like the rest of the economy over the last few years. Center Court could not make rent payments towards the end of last year and decided to close its doors.

Webber and Dudum signed a lease with Opus West Corporation, a real estate developer. Opus West filed for bankruptcy protection last year, one of many real estate developers that were punished by the recession.

Mitra made a New Year resolution in 2010 to help a million entrepreneurs globally reach $1 million in revenue (and beyond). She believes this would be the foundation of a robust, distributed, and sustainable economic value creation that would add up to a trillion dollars in global GDP, and result in creating at least 10 million jobs around the world.

Because every moment is fleeing, don't waste words and moments without doing what is in your hearts. Everyone fails, but everyone also has the fortune to pick him/herself up. If you are thinking of doing something negative to make ends meet, do not do it before it is too late. There may be forgiveness, but there will be pain and guilt from knowing who you are and what you did. Don't steal or seek revenge. Control anger and hate. Life is immense like the ocean. For Mitra, as she started talking to her readers about her New Year resolution, many of them stepped up to help out through a program they now formalized, called 1M/1M Ambassadors.

Be brave everyday to step into the ocean and face the immensity. Get away from situations where people do not value you. Tell yourself that you are made to be where you want to be. Believe it. With Mitra, she has been writing to her connections for support in bringing the key piece of the 1M/1M initiative to a broader audience of entrepreneurs - her free online strategy weekly roundtables address positioning, financing, and other aspects of a startup venture. Up to 1,000 people can attend each session, but only the first five who register to pitch will be able to present their business ideas. All attendees are able to join in on the conversations via a live chat.

Life is about minimizing regrets. When making choices, weigh which options cause regret. Business and people break hearts. Don't cry over people or companies who won't cry over you.

With Mitra, she seeks ways of collaborating by offering guest columns to fellow writers, as in a series, Blogosphere On Bootstrapping, which writers contributed. She welcomes people joining the 1M/1M program.